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PGE had PLN 2,690 million net profit, PLN 3,158 million EBIT profit in the first half of 2021.
Author:Mariusz Dasiewicz
PGE recorded PLN 2 690 million of consolidated net profit attributed to shareholders of the parent company in the first half of 2021 against PLN 688 million of loss a year earlier, the company reported in the report.
Operating profit amounted to PLN 3 158 million compared to PLN 271 million profit the year before.
Consolidated sales revenues reached PLN 21,908 million in the first half of 2021 compared to PLN 22,776 million the year before.
The better results than in 2020 were mainly influenced by the accounting solution of the remediation and actuarial reserves (+949 million PLN), while last year these reserves were established at PLN 474 million. The changes in the level of reserves are due to changes in market interest rates, explained.
The net profit in the first half of 2021 amounted to PLN 2,719 million against a loss of PLN 637 million in the first half of 2020. The result is a result of good operational results, one-off events at EBITDA level, which was mainly affected by the dissolution of the remediation reserve of PLN 932 million, the reversal of the write-off in the Renewable Energy Sector for the amount of PLN 40 million and the recognition in financial revenues of the sale of 50% of offshore shares in projects of PLN 324 million, read further.
"We are pleased with the good financial result, which is the result of the restructuring of the Group's business. However, we must remember that it is also due to a number of one-off factors, such as the dissolution of the remediation reserve or the unexpected favourable market conditions, such as the decline in electricity imports to Poland, a strong increase in electricity demand as a result of dynamic economic growth after the epidemic. They allowed to dismiss the energy problems coming with rising CO2 emission allowances prices by several months," said Wojciech Dąbrowski, quoted in the Communication.
The EBITDA of the PGE Group in the first half of 2021 reached PLN 5.3 billion, increasing by PLN 2.4 billion in relation to the first half of 2020 mainly due to operational factors such as higher electricity and heat production, rising heat prices, revenue from the power market and higher volumes of distributed energy and improving margin in the sales segment, also was given.
In the segments, the results were as follows:
– Conventional Energy (EBITDA profit of PLN 2,049 million, increase by 165% y/y). The decrease in the margin on electricity production was offset by higher production and capacity market revenues. The results were also positively affected by the resolution of the remediation reserve of PLN 930 million.
– Heating (EBITDA profit of PLN 715 million, increase by 45% y/y). Significantly improved results due to increased production and heat prices.
– Renewable Energy (EBITDA profit of PLN 382 million, increase by 27% y/y). Higher energy prices on the SPOT market offset the decline in wind power generation due to less favourable wind conditions.
– Distribution (EBITDA profit of PLN 1,382 million, increase by 23% y/y). The increase in results mainly due to the higher volume of energy transmitted.
– Turnover (EBITDA profit of PLN 706 million, increase by 278% y/y). There has been an increase in the commercial margin as a result of more favourable security of electricity purchases.
PGE Group's investment outlays in the first half of 2021 amounted to PLN 2.2 billion and amounted to PLN 0.3 billion lower year/year. The investment increased in the conventional energy segment mainly due to the construction of two gas and steam blocks No. 9 and 10 at the Lower Odra Power Plant. The decline in investments was seen in the Renewable Energy segment, as Starza/Rybice and Karnice II wind farms were implemented in the second quarter of 2020, as well.
The net debt level was PLN 5.9 billion, which means a decrease of PLN 1.3 billion compared to the fourth quarter of 2020 and a decrease of PLN 3.5 billion in relation to the first half of 2020. The net debt ratio for EBITDA (net debt/ LTM EBITDA) was 0.71x and decreased significantly in relation to the same period of 2020 (1.71x).
The net electricity production volume of PGE Group manufacturing units recorded an increase of 4.4 TWh (15% y/y) in the first half of 2021 and amounted to 32.9 TWh. Higher level of electricity production was the result of a surge in demand of the National Power System, lower net energy imports and a weaker generation of wind sources. Production in lignite power plants increased significantly, reaching 17.6 TWh (change of 20% y/y, the biggest increase of production occurred at Turów Power Plant by 2.0 TWh). Coal generation increased by 15% y/y and amounted to 11.3 TWh. Renewable energy sources produced a total of 1,2 TWh (decreased by 8% y/y), the smaller production in this segment was mainly affected by less favourable wind conditions.
The volume of distributed electricity reached 18.6 TWh (an increase of 8% year-on-year, due to higher electricity demand in KSE). The sale of electricity to final customers was 18.8 TWh (a fall of 7% y/y including business tariffs). The volume of heat sales was 32.1 PJ (an increase of 16% y/y) due to external temperatures lower by an average of 2.6°C y/y, listed.
In individual terms, the net profit in the first half of 2021 amounted to PLN 1,601 million compared to PLN 1,547 million in profit the year before.
The PGE Group produces 41% of net electricity production in Poland and its share in the heat market is 18%. The group estimates its market share of renewable energy at 10%. In the distribution area, about 123 thousand km2 PGE serves 5.5 million customers. Its market share in volume of distributed electricity is 25% and sales to final customers are 33%. The company has been listed on the WSE since 2009.
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